Business owners should plan for the unexpected and be ready to adapt to changes.
The immediate consequences for poor planning and slow reaction times is usually not severe.
However, a few circumstances can have an immediate and profound effect on your business. It is important to identify and plan for these situations.
Imagine you suddenly need to take care of an incapacitated family member. Maybe this was caused by an aging parent, a serious medical diagnosis or is the result of a tragic accident.
Either way, a significant amount of your time and financial resources may be at risk. Have you planned in advance to mitigate this risk? Have you purchased insurance for long-term care or catastrophic illness?
Would your business continue to thrive if you were forced into an extended absence? If not, what resources are available to care for them and allow you to stay involved in your business?
Now imagine that your business partner suddenly passed away. Would the heirs have any claim or voting rights in the business? Would you need to pay the heirs for your partner’s interest in the company? How much would that cost, and where would you get the money?
Finally, consider the fact that successful business owners work hard all their lives and hopefully they accumulate significant wealth.
Even when they plan well and hire an attorney to create a living trust, their estate often ends up in probate and their assets are not distributed according to their wishes.
Their surviving loved ones are forced to spend significant time and money fixing things after they are gone.
How does this happen and what simple things could have been done differently to avoid it? We will cover this topic in a future Biz Tips article.
There may be several other potential serious threats to your business. What are they, and what is your plan to address them?